Three men arrested in the Hong Kong Mercantile Exchange case were not former or current employees of the troubled trading platform, its chairman and executive councillor Barry Cheung Chun-yuen said on Wednesday.

But he did not say how the three were connected to the case of the failed exchange, which the police commercial crime bureau is investigating.

Cheung met the media at the exchange's office at Cyberport on Wednesday morning and confirmed that Chief Executive Leung Chun-ying has approved his application for leave – with effect from Tuesday – from his public posts, including as executive councillor and chairman of Urban Renewal Authority.

Cheung said on Wednesday there was no need for him to resign and taking leave of absence was an “appropriate arrangement” at this stage.

“If there is such a need in the future, I will resign immediately,” he said.

If there is such a need in the future, I will resign immediately

Barry Cheung

When asked whether the incident would damage the government’s governance credibility, he said, "This is a private enterprise situation and my personal situation. I think it will not have any influence on the government."

He confirmed that he remained the major shareholder of the exchange, but did not answer questions about where the exchange’s main funding came from.

Referring to a rumour that his home had been searched by the police on Tuesday night, he said it was false. Police officers only came to maintain order after the building management reported to them that many reporters had gathered there before he read out his statement last night.

Cheung said he would do his best to maintain the exchange’s operations and understood that the incident had caused much distress to his staff.

He said he would not further comment on the case as it was now under police investigation. He left after reading out his statement and answering three questions.

Officers from the police commercial crime bureau on Tuesday arrested three men after it was asked by the Securities and Futures Commission to look into the affairs of the HKMEx. The exchange returned its licence to the watchdog last week after it became clear it was no longer able to meet the SFC requirement of having sufficient cash to cover nine months of operations

One man was arrested on suspicion of using a false instrument and two others were on suspicion of possessing false documents. Officers on Tuesday evening also took away computers and documents from the HKMEx office at Cyberport.

Cheung, 56, is chairman of the Urban Renewal Authority and, in January, was appointed deputy head of the Commission on Strategic Development, which explores long-term development strategies for Hong Kong. He is also a key ally to Chief Executive Leung Chun-ying and headed his election campaign office last year.

Reports suggested Cheung had borrowed huge sums, including from a property tycoon, to save the exchange, raising suspicion of collusion among tycoons. Cheung rejected the claims.

Leung, speaking about the case on Wednesday, said his administration would handle it impartially and would not intervene in the SFC and police works.

He also said the cancellation of a regular meeting of the Executive Council on Tuesday had nothing to do with Cheung’s affairs.